When Will A Spouse Share In Post-Separation Increases In The Payor’s Income?

Spousal support is often an issue that arises in both common-law separations and divorces. It is not the case that spousal support will be paid to every couple with an income disparity. However, when a spouse is entitled to spousal support, what happens when the spouse paying spousal support (the “payor spouse”) has an increase in income? Is the spouse receiving support (the “recipient spouse”) entitled to share in this increase through an adjustment of spousal support? The answer is it depends. 

The recent Ontario Superior Court case of G.E. v J.E. considers this issue, ultimately finding that the recipient spouse was entitled to share in post-separation increases in the payor spouse’s income. 

To consider post-separation income increases, a spouse must first be entitled to spousal support 

The Divorce Act sets out the objectives and factors to be considered in making a spousal support order. In the case of G.E., the payor spouse did not dispute that the recipient spouse was entitled to support. The Court still engaged in a detailed analysis of her entitlement, as the basis for entitlement impacts both the quantum and duration of spousal support.  

In the case of G.E., the recipient spouse was entitled to spousal support both on a compensatory basis (as she made sacrifices for and contributions to the payor spouse’s career) and a needed basis (a consideration of her relative financial position). The recipient spouse’s career was secondary to the payor spouse’s career throughout the marriage, including moving across the province for the payor spouse’s career advancement. The recipient spouse also stayed home to care for the parties’ child and support the payor spouse’s career. At the time of separation, the recipient spouse had been out of the workforce for 14 years. The Court ordered spousal support that was indefinite in duration but subjects to review in 10 years or on a material change in circumstances. 

There is no automatic right for a spouse entitled to spousal support to share in post-separation income increases

Ontario case law is clear that a support recipient is not automatically entitled to increased spousal support based on the post-separation increases in the support payor’s income. This has been affirmed by numerous Ontario Court of Appeal cases, including Patton-Casse v Casse, Carr v Condon, and Choquette v Choquette. 

Several factors impact whether a recipient spouse is entitled to share in all or part of the increase in the support payor’s income 

When the parties separated in the spring of 2016, the payor spouse was earning about $450,000 per year. In 2020, the payor spouse’s income grew to over $500,000 as he took over as chair of his business group. The payor spouse in G.E. argued that the recipient spouse should not be entitled to share in the post-separation increases in his income.

There are several factors that a court should consider when determining if a recipient spouse is entitled to share in post-separation increases in the support payor’s income. These factors were enumerated in Want v Gauthier, and they are:

1. Are the post-separation increases in income connected to the recipient spouse’s efforts and contributions? This can include direct and indirect contributions. 
2. Was the recipient spouse’s career sacrificed for the benefit of the payor spouse’s career? The recipient spouse is not required to have made career sacrifices for the benefit of the payor spouse, but this is an additional factor that can increase the share of the post-separation increase.
3. What is the length of time since the separation and the increase in income? The closer the increase to the time of separation, the more likely a court may find that the recipient spouse is entitled to share in that increase and the more likely a recipient spouse’s contributions were involved in that increase. 
4. What was the reason for the increase in income? For instance, it could be from a promotion at an existing job versus starting a new job in the same or a new industry. The court will examine whether the income increase is connected to the knowledge, skills, and experience that the payor spouse developed during the relationship and if the recipient spouse supported that development during the relationship.
5. Are there any other compensatory factors? This catch-all allows the court to consider any other relevant factors to compensatory support.
6. Is there a non-compensatory claim, and what is that claim based on? In some cases, where the recipient spouse has a very strong needs-based claim (for instance, due to illness), post-separation sharing in income increases may be appropriate even if the compensatory claim is not strong.
7. Does sharing of post-separation increases in income assist with the Divorce Act’s objective of maintaining a reasonable standard of living relative to the standard during the relationship?
   
8. Why did the increase occur? The court will assess whether the increase is from, for instance, the payor spouse’s decision to increase their working hours (for instance, their job did not change, but they started working overtime) or perhaps starting a second job to work on weekends. If this is the case, then the court may not order these increases to be only partially shared. 

Recipient spouse was entitled to share in the payor spouse’s post-separation increases in income

In the case of G.E., the court held that the recipient spouse was entitled to share in the payor spouse’s post-separation increases in income. This was based on the following factual findings about the parties’ relationship and the reasons for the increase in the payor spouse’s income:

• The recipient spouse is entitled to spousal support on a compensatory basis.
• The payor’s spouse’s increase in income is a result of his work or the career that he built throughout the relationship.
• The payor spouse’s additional income from being the chair of his business group is closed related to his career throughout the relationship and is a result of that career.
• The parties’ personal and financial lives were fully integrated throughout the relationship.
• The payor spouse’s increase in income occurred only a few years after the long-term relationship ended.
• No “intervening change” in the payor spouse’s career was responsible for the income increase.

Contact the Windsor Family Law Lawyers at Johnson Miller Family Lawyers for Advice on Spousal Support Claims 

The experienced family lawyers at Johnson Miller Family Lawyers focus exclusively on family law matters and regularly assist clients in resolving spousal support claims and child support issues. Our family law team provides clients with honest advice tailored to their unique circumstances so that you know what to expect throughout the process and understand your rights and obligations, particularly before agreeing to contractual terms. To discuss your matter with a family law team member, please contact us online or call us at 519.973.1500.